1. Field of the Invention
This invention relates to the field of on-line product sales. More specifically, the invention comprises a method for extending the termination point of a timed auction in order to maximize the price bid for items sold over the Internet.
2. Description of the Related Art
Many products are now sold over the worldwide electronic communication network known as the Internet. Many methods are used to sell the products, with the “electronic auction” being one particularly popular format. In this format, an item for sale is displayed for viewing on remotely-located computer terminals and remote users submit “bids” in electronic form. There are many websites currently using this format, with the site owned by eBay, Inc., of San Jose, Calif. being the most popular.
The company conducting the electronic auction stores information on a computer “server.” Remote “client” users are allowed to create accounts on this server. The client-users are thereby registered to take place in one or more auctions.
The registration process includes information such as the client-user's name, email address, and physical address. During an on-line auction, the remote client-users electronically submit bids to the hosting server. A website display is provided by the hosting server so that the client-users can view details regarding the auction. The displayed information is regularly updated for all participants to see.
As will be known to those skilled in the art, data must be transmitted back and forth between the host-server computer and the client-user computer. The host-server data is used to update the web page display on the client-user's computer monitor. Data (such as a “bid”) can likewise be transmitted from the client-user to the host-server, where it can be displayed on the web page shown to all users. This exchange of data and presentation of displays on computer monitors are well known in the art, so these operations will not be described in further detail. However, the user should understand that the drawings included in this specification represent simplified computer “web page” type displays. Many different formats could be used for such displays and the invention is certainly not confined to any one format.
While electronic auctions have been highly successful in recent years, they have assumed a format which differs substantially from live auctions. It is impractical to have a live “auctioneer” conducting every auction of every item sold on line. Thus, many providers use a time limit to bring an auction to a close.
FIG. 1 shows a representative display presented to a prospective bidder in a prior art on-line auction. Item identification display 12 includes a digital image 10 and a text description 14. These are typically provided by the seller. Bid button 16 can be activated by a pointing device such as a mouse or touch pad. Once actuated, the user is prompted to enter a bid in bid entry box 18. The current maximum bid is shown in current bid indicator 20.
End time display 22 shows the time at which the auction is set to close. A countdown box—which shows the time remaining—may also be included. In the example, the current bid is $150. Some auctions impose a minimum increment, which would also be displayed on the page. If, as an example, the minimum increment is set at five dollars, then a client-user would have to submit a bid of $155 to become the current top bidder.
The depictions shown are rather simplistic. Actual web pages for an on-line auction often include dialogue boxes displayed on two or more pages with the user being prompted to select additional “layered” windows.
By definition, timed auctions remain open until the time runs out. The client-user who has submitted the highest bid at the instant the auction closes becomes the winning bidder. Such a system is easily automated. It also provides a clear criterion for selecting the winning bidder. Unfortunately, however, the arbitrary time criterion produces unwanted behavior.
Live auctions are an effective system for obtaining the fair market value of the items sold. In fact, the competitive nature of a live auction can even produce inflated sale prices. The dynamic of a timed, on-line auction is fundamentally different. Rather than submitting a well-reasoned bid, many users will monitor the auction and wait for the last possible moment to bid. A flurry of bids is then submitted in the closing seconds. This phenomenon is so well known that many people now earn a living as professional “bid submitters.” They are hired for their ability to time the closing of timed auctions.
The losing bidders would have frequently been willing to pay more for the item. They simply ran out of time. Thus, the seller has lost the opportunity to obtain the best possible price. The losing bidders have lost the opportunity to make a purchase at a price they were willing to pay. These issues frustrate market optimization. The present invention seeks to remedy these shortcomings by selectively extending the closing point of timed on-line auctions.